Interestingly, while all independent sources agree that AMD's gaming graphics sales in Q1 2024 are not lower or even higher than in Q1 2023, its earnings report states that its gaming graphics sales are down by nearly half and "coincide" with a similar increase in sales in its data centre division to keep the total sales nearly the same.
Considering the more stable price of AMD gaming graphics cards shown above, it is hard to believe their sales of gaming graphics dropping so hard. In fact, the better estimation is that they have a modest increasing in sales of gaming graphics but a slight decreasing in sales of data center accelerators this year.
As a result, it's reasonable to assume that AMD simply reclassified half of their gaming graphics sales as data centre sales to fit their AI narrative to maximise shareholder value (higher valuation -> lower future equity return -> lower equity capital cost -> lower WACC -> higher shareholder value) because there is minus increase in the total sales considering inflation.
While this is not accounting fraud, it is a clear lie to mislead investors in order to inflate the share price. Maybe that's one of the reasons why its insiders only want to sell their stonks:
Considering that AMD's market cap is currently ten times that of SMCI and exceeds the $200bn megacap threshold, it's absurd that a megacap company would engage in such blatant fakery and go almost totally undetected.
Since the US market is already the market with the most rigorously enforced accounting system, the most sophisticated investors and the most developed short-selling mechanism in the world, and megacaps are the part of the market with the most scrutinised accounting, the most informed investors and the easiest short-selling, I can't imagine how untrustworthy anything from unlisted/private businesses, small and medium-sized public companies, or from any institution/organization or even individual, could be.
Edit: However, I don't think that means the stock market will fall or even doom and gloom. Even Bitcoin, which requires massive energy costs to maintain, and is extremely rife with customer money abuse, manipulation and fakery, has managed to maintain its highs with long term speculation, and common stock, as an inferior claim on the assets of publicly traded companies, backed by the profits of more profitable, higher growth and lower valued publicly traded companies, is much more sustainable than Bitcoin.
Edit2: Yes, this time is different. Like the allegory of Bitcoin, this time there could be worse accounting irregularities, wilder speculations and bigger crash(es). I hope they would be true because it would only benefit factor investors a lot like the mania and its crash in 1990s and early-2000s. Just be careful of a possibile momentum crash. For example, LLY as a megacaps may be sus as well
